Adidas’ 2023 Sales Neutral, Operating Profit Down — But Guidance for 2024 Positive

Adidas says it performed better than it expected to in 2023, even as results disappointed market analysts. The last quarter of the year ended with Adidas’ sales falling 7.6 percent to 4.81 billion euros. For all of 2023, revenues dropped 4.8 percent to 21.43 billion euros.

Adidas CEO Bjorn Gulden, who took on the job at the beginning of 2023, noted the company is still working to recover from the loss of its very profitable Yeezy line. Its long-running collaboration with the musician Kanye West, also known as Ye, ended after West made a number of racist and anti-Semitic statements.  

“Despite losing a lot of Yeezy revenue and a very conservative sell-in strategy, we managed to have flat revenues,” Gulden said in a statement. “We still have a lot of work to do, but I feel very confident we are on the right track. We will bring Adidas back again.”

If it were not for the Yeezy business, Adidas would have seen currency-neutral revenues grow 2 percent in 2023, the company said.

The results for both Q4 and the full year, which Adidas had already announced in a preliminary statement in January, were below market consensus.

North America continued to be a concern for the German giant. Over the year, sales there fell 16.1 percent, in currency neutral terms, to 5.22 billion euros.

“This market was particularly affected by the negative Yeezy impact,” Adidas explained.

Latin America is a much smaller market but there Adidas saw growth of 21.6 percent, in currency neutral terms, and sales totaling 2.29 billion euros.

In Adidas’s largest territory, its home market of Europe, the Middle East and Africa, sales dipped 0.4 percent, in currency neutral terms, in 2023. Adidas made 8.23 billion euros in its home territory last year.

Business in Greater China and Asia-Pacific looked better. In the fourth quarter of 2023 the company saw significant growth in Greater China of 36.8 percent, currency neutral, but this was likely due to the ongoing Chinese recovery after COVID-19 lockdowns during 2022.

Over the year, in currency neutral terms, Adidas saw growth of 8.2 percent in Greater China and 7 percent in Asia-Pacific. In Greater China, sales hit 3.19 billion euros and in Asia-Pacific they totaled 2.25 billion euros.

Footwear sales improved 4 percent last year, while apparel sales slipped 6 percent and were badly affected by high inventory levels, the company said in its statement.

Adidas’ operating profit also decreased significantly, falling 59.9 percent from 669 million euros in 2022 to 268 million euros in 2023.

Adidas had originally predicted an operating loss of around 700 million euros in 2023. The year’s result meant that Adidas had actually improved that outlook by around a billion euros, he pointed out.

Some of this was certainly due to the decision to sell off remaining Yeezy product, which added 750 million euros to the company’s sales in 2023. More Yeezy goods will be sold in 2024 and should bring in about 250 million euros, Adidas noted.

The German sportswear giant remained positive about what it could achieve in 2024. The company predicts currency-neutral revenues to increase at a mid-single-digit rate during 2024. Gulden said he expected some growth in the first half of the year but that the second half of 2024 should be better.

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